Feb. 12, 2018
In the recent past, we talked about the churning occurring in the markets. This is caused by the inability of the market to establish a trend because no news or events are pushing it away from the median that has been established since July.
As I have stated before, oftentimes when markets churn like this, they have a tendency to break out the wrong side and then move the opposite way. Before we made the highs in corn in 2012, $3.60 was generally a stopping point, with the exception of 1996 when corn went to $5. In the bean market, $10 was the stopping point.
With the lack of anhydrous application and the price increase, there may be a lot less corn on corn this year, but I don’t expect domestic bean acres to fall much. There have been a few token bean imports by China.
We are coming into the time when many of their imports are sourced from South America. I continue to expect China will only do what is best for China.
Last week the cattle market was steady to higher with a $125 top — hanging was $198-$200. Choice box meat is still only about $4 over Select, and the packer does not seem as aggressive as he needs to be amidst some real weather concerns.
Box meat figures for last week showed 22-day-and-up sales at 707 loads, NAFTA at 140 and overseas, 291. These figures are disappointing,
Results of the fat cattle sale today at Dunlap were lower. Prices ranged from $120-$125 on smaller receipts due to the inclement weather.
Nothing has changed politically, and the government may shut down again. If this happens, I think we need to do three things. First, eliminate PAC money; second, eliminate lobbyists; and third, establish term limits so our representatives and senators would understand that they don’t have the rest of their lives to play with the American public’s destiny. This would cut into their financial stability and spare the working man the inability to control his destiny.
The January crop report was released last week. Not all the numbers were complete and there will be more information to follow. The numbers didn’t change much. Even though production was lowered, carryovers increased in some areas due to lack of exports.
I still believe feed needs should be covered — especially corn on breaks. The cost of feeding cattle is a lot higher in the Midwest because of the poor gaining conditions, the scarceness of hay, and the limited number of corn stalks baled in this area.
Keep in mind that we still have a huge carryover in grain and rallies will be used to sell grain so the American farmer can keep his cash flow moving.
Good luck and good marketing.
This weekly report is for informational purposes only and is not to be construed as an offer to sell or a solicitation to buy the commodities listed herein.